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              Bahrain moves to strengthen ICT services

              OBG

              June 30, 2016
              in IT & Telecom
              0

              Providing countrywide high-speed internet service is the overarching aim of Bahrain’s latest master plan for the kingdom’s ICT industry.

              Launched on May 8 and set to run over the next three years, the fourth National Telecommunications Plan (NTP) targets improving connectivity and data transfer speeds across the kingdom, while also providing universal fiber optic coverage through stronger infrastructure.

              Shoring up services
              The newest master plan builds on the achievements of the previous three programs, which facilitated the liberalization of Bahrain’s ICT sector by laying the groundwork for the development of a digital economy and addressing shortfalls in hard infrastructure and the regulatory framework.

              In a policy shift welcomed by key industry stakeholders, Bahrain’s Ministry of Transportation and Telecommunications will oversee the implementation of NTP, rather than the Telecommunications Regulatory Authority (TRA).

              “The TRA shouldn’t be expected to act as both regulator and enforcer,” Rashid Al Snan, CEO of Etisalcom Bahrain, an ICT services provider, told OBG. “Enforcement is bound to be more efficient and effective when overseen by a ministry.”

              The NTP also seeks to enhance Bahrain’s status as a regional ICT center, as it strengthens electronic communications security and boosts the international connectivity of the country’s telecoms networks.

              Fiber going further
              Under the new plan, Bahrain will expand its fiber optic network to offer full coverage nationwide within three years, with the aim of providing affordable, high-speed access to fixed-line broadband services.

              Veer Passi, CEO of Kalaam Telecom, Bahrain’s second-largest internet services provider for corporate services, welcomed the plan’s objectives, telling OBG that they indicated “a clear sense of seriousness about developing the Bahraini ICT market”.

              “The development of one network with all fiber infrastructure under one roof and standard pricing is especially significant,” he added.

              The investment and development program will also ready Bahrain for the deployment of 5G technology, which marks the next step in the evolution of mobile telecoms.

              Operators in Bahrain are eyeing a rollout of 5G services by 2018 at the latest. The NTP foresees allocating new spectrum to service providers, which will be required for a future 5G launch.

              While there has been a steep downturn in average revenue per user over the past eight years, earnings from broadband have increased, with the number of broadband subscribers rising from 1.63m in 2013 to 2m in the first quarter of 2016, according to the TRA.

              Mobile services now make up 50% of all broadband usage and account for more than a third of all broadband revenues.

              Stronger infrastructure and comprehensive fiber optic coverage should help shift this balance, with advanced connections to the home and workplace generating higher demand for content and data services to fixed platforms.

              Competitive marketplace
              Competition in Bahrain’s ICT market is fierce, with the main industry players competing for market share with a rising number of internet firms offering communications and data services.

              Bahrain Telecommunications Company (Batelco), recorded a 33% year-on-year (y-o-y) drop in net profits in the first quarter of 2016, while Kuwait-owned mobile telecommunications company Zain’s net profits were also down 10%. Viva, a subsidiary of Saudi Telecom Company, meanwhile, saw its net profits for the quarter slip 5% y-o-y.
               
              Zain cited tougher domestic competition and foreign exchange volatility among the contributing factors, according to international media reports.
               
              All three firms, however, noted positive trends when it came to acquiring customers.

              Zain continued to gain market share, recording an increase in its customer base compared to the previous quarter, while Viva’s client list had reached 2.4m by the end of March. Batelco saw its broadband client base rise by 8%.

              Ihab Hinnawi, group CEO of Batelco, attributed the strong growth to rising demand for television and other value-added services, fueled by increased investments in infrastructure, according to local press reports.

              Supporting SMEs
              Higher broadband take-up also reflected the growing needs of Bahrain’s business sector and rising demand for advanced digital solutions.

              “Cloud capabilities, [over-the-top] TV services, fiber to the home and delivery of superfast broadband are the areas we are tightening our focus on during 2016,” Hinnawi said, when announcing the company’s first-quarter results.

              NTP also comes at a time when there is growing awareness about the advantages of ICT as an economic tool.

              Improved IT services will be pivotal in helping small businesses grow, according to Ahmed Alhujairy, chairman and group CEO of Gulf Future Business, a corporate services and ICT consultancy firm.

              “The Bahraini market is too small to support growth across small and medium-sized enterprises, so a strong IT infrastructure has a key part to play in enabling these businesses to scale up quickly in preparation for expanding into neighboring GCC markets,” he told OBG.
              Oxford Business Group
              30 June

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